Italy Maintains S&P Credit Rating at 'BBB' Despite COVID-19 Impact

[Image source=Yonhap News]

[Asia Economy Reporter Choi Dong-hyun] Italy, one of the countries hardest hit by the novel coronavirus disease (COVID-19), avoided a downgrade to a non-investment grade in the rating by the American credit rating agency Standard & Poor's (S&P).

According to local media on the 26th (local time), S&P announced on the 24th that it would maintain Italy's credit rating at 'BBB.' This is two levels above non-investment grade. The previous 'negative' outlook remains unchanged. This means there is a high possibility of a downgrade if the government's debt situation worsens.

The S&P credit rating evaluation came amid widespread pessimistic forecasts that Italy's fiscal deficit and national debt would significantly increase due to the impact of COVID-19.

Earlier, the Italian government approved an 'Economic and Fiscal Plan' setting this year's national debt and fiscal deficit targets at 155.7% and 10.4% of gross domestic product (GDP), respectively. These figures represent a significant increase compared to last year's 134.8% and 1.6%.

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